Tariffs may cost fruit and nut industries more than $3 billion

WASHINGTON — A recent report from the University of California — Davis suggests trade tariffs may cost U.S. fruit and nut industries $2,640 million in lost exports and $3,338 million in total lost revenue at a time of record production expected for some tree nuts.

Losses for 10 specific fruits and nuts, some produced mainly in California, were estimated at about $2,640 million per year based on export value and at $3,338 million based on potential impact on price in remaining markets, according to an Aug. 1 brief authored by Daniel A. Sumner and Tristan M. Hanon of the University of California Agricultural Issues Center and Department of Agricultural Resource Economics at the U.C. Davis.

When considering potential lost export value for nuts, almonds topped the list with a value of $1,019 million, based on 13% of total production exported to affected markets, followed by pistachios at $430 million (14% of production exported), walnuts at $247 million (13%) and pecans at $172 million (22%). Apples were the most affected fruit with annual losses projected at $386 million (7.5% of production exported), followed by sweet cherries at $145 million (9%), oranges at $121 million (8%), table grapes at $83 million (3.2%), raisins at $26 million (0.9%) and tart cherries at $11 million (1%).

When considering potential total lost revenue, almonds led the way at $1,580 million annually (an 18% price decline), followed by apples at $419 million (8%), pistachios at $384 million (16%), walnuts at $315 million (15%), pecans at $224 million (28%), sweet cherries at $160 million (10%), oranges at $133 million (9%), table grapes at $86 million (3.3%), raisins at $26 million (0.9%) and tart cherries at $11 million (1%).

The U.C. Davis report included tariffs imposed by China/Hong Kong on all 10 items, tariffs by Turkey on all four nuts, tariffs by India on almonds, walnuts and apples, and tariffs by Mexico on apples. California is the nation’s largest producer of almonds, pistachios, walnuts and grapes.

The U.S. Department of Agriculture said it would purchase more than $1.2 billion worth of commodities under the Food Purchase and Distribution Program of which more than $500 million is targeted for fruits, nuts and vegetables, part of an overall $12 billion earmarked for farmers affected by “unfair retaliatory tariffs,” according to Secretary of Agriculture Sonny Perdue.

Purchases will be in four phases over several months with products distributed by the U.S.D.A.’s Food and Nutrition Service to nutrition assistance programs. Nut purchases will include $85.2 million for pistachios, $63.3 million for almonds, $34.6 million for walnuts, $16 million for pecans, $7.7 million for macadamias and $2.1 million for hazelnuts. Fruits included $111.5 million for sweet cherries, $93.4 million for apples, $55.6 million for fresh oranges, $48.2 million for grapes, $32.8 million for cranberries and smaller amounts for others. Also included were $44.4 million to buy potatoes. The U.S.D.A. noted that program details were not yet finalized for cherries and almonds.

Industry sources said the government’s purchase plan will be far short of making up the full amount of losses incurred from tariffs and lost export markets, especially when considering the long-term impact.

Meanwhile, the U.S.D.A. also has forecast hefty production numbers of some of the most-affected commodities. For example, U.S. 2018 almond production (California) was forecast at a record 2,450 million lbs, up 8% from 2017. Hazelnut production (Oregon) was forecast at a record 52,000 tons, up 63% from 32,000 tons in 2017 and up 5% from the prior record of 49,500 tons in 2001. Forecasts for 2018 production of other nuts have not yet been issued by the U.S.D.A.